ExOne Taking a Bite Out of Manufacturing, One Printer at a Time

From the controversial to the awe-inspiring, 3D printing is used to create everything from guns, to functioning body parts, and even food. The possibilities seem endless for an industry that shapes ideas into actual products.

Among the companies trying to capitalize on the growth of 3D printing, also called additive manufacturing, is Pennsylvania-based ExOne (XONE). The company makes and sells the machines that do the printing and also takes orders to create specific products.

Artists have tapped them to print intricate sculpture designs, kitchenware companies have ordered frying pan handles, and the company has even printed prosthetic arms for wounded veterans.

"Each day you see another article about something that’s being produced additively and how the additive world is going to make this tremendous difference," says Kent Rockwell, chairman & CEO of ExOne, in the attached video. "I believe that the additive world will make a tremendous difference."

ExOne prints in plastic, glass and even sand, but the most common material is metal.

Here's how it works: Customers email their design to the company and it is loaded into the 3D printer's computer which splices it into thin digital layers. The printer takes that design and lays down a small amount of steel dust in the shape of the first layer. It then adds a coating of special glue, then more steel dust is layered on until the entire design is molded.

The result is then put into an oven where it is infused with other metals to strengthen the finished product.

Creating 3D items for a customer makes up 35% of ExOne's business. The rest comes from building the printers themselves and selling them to industrial companies around the globe.

Rockwell wants to change that model. He tells Breakout he'd like to see 50% of his business dedicated to printing actual 3D products in order to create repeat customers.

"Once we had the machines running it became apparent to me that we needed to create what I call demand push," says Rockwell. "And so we designed products and went out into the market and said 'hey look, this is what our machines can do and maybe you’d like this.'"

And the demand push is working not just for ExOne but across the broader industry. 3D printing was a $1.7 billion industry in 2011 and is expected to top $6 billion by the end of the decade.

This past February ExOne became one of the year’s most successful initial public offerings, raising over $95 million in its bid to go public.

But they were greeted with a harsh reality after reporting a first-quarter earnings miss in early May. ExOne's stock price tumbled more than 20% in just two days, but is still up more than 75% since the IPO.

"In the world of reporting every 90 days it’s a contradiction sometimes to good investment principals of how you want to maximize the value of the investment," says Rockwell about life as a publicly traded company. "You’re constantly having to consider those factors of what do they need this month over what do we need over a longer year perspective."

It's not just Wall Street challenging ExOne. Competition is fierce in an industry that still favors conventional manufacturing.

"Our primary competition is the traditional subtractive processes that are out there and the ability to economically justify that our 3D process is more efficient," Rockwell explains. 3D printing "won’t replace traditional manufacturing, but it’s going to take a bite out of it and it doesn’t have to take a very big one for you to have a very large global market opportunity."

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